Issuing an appointment letter to every employee is a statutory obligation, not a matter of practice. It must carry the prescribed particulars, and it is the document a labour authority, an inspector or a tribunal will ask for first. Issue it on or before the date of joining, take a signed acknowledgement, and keep it on file for the retention period.
Letter of Appointment
[COMPANY NAME]
Issuing an appointment letter to every employee is a statutory obligation, not a matter of practice. It must carry the prescribed particulars, and it is the document a labour authority, an inspector or a tribunal will ask for first. Issue it on or before the date of joining, take a signed acknowledgement, and keep it on file for the retention period.
[COMPANY NAME] CIN: [CIN] [REGISTERED OFFICE]
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The consolidated labour legislation requires an appointment letter containing prescribed particulars to be issued to every employee. This is not limited to senior staff or to permanent employees. An establishment that has issued offer letters but no appointment letters has not complied, and it is one of the first things an inspection will look for. Issue on or before joining and take a signed acknowledgement.
Under the consolidated definition, the components excluded from wages cannot exceed half of total remuneration; where they do, the excess is added back and treated as wages. Basic and dearness allowance should therefore be at least half of the total. Provident fund, gratuity, overtime, leave encashment and retrenchment compensation are all computed on that base, so an incorrectly structured salary understates every one of them. Part A of the Schedule includes a percentage line for exactly this check — complete it.
Where an employee is eligible for overtime, it is payable at twice the ordinary rate of wages. Employers who pay a flat allowance for extra hours, or who treat all staff as exempt from overtime, carry a real exposure. Establish which categories are eligible, require prior authorisation, and record hours.
Wages due on termination must be paid within two working days of the employment ending, whatever the reason — resignation, dismissal or retrenchment. The old practice of settling forty-five days later does not comply. Build the exit process backwards from that deadline: clearances, recovery of advances and final computation all have to happen before the last working day, not after.
Confirmation is not automatic in this template, but silence is a weak position: an employee kept on probation indefinitely without written extension may be treated as confirmed. Extend in writing, state the reason and the new end date, and issue a confirmation letter when the probation ends satisfactorily.
Clause 8.2 permits termination for misconduct only after an inquiry conducted in accordance with natural justice. Dismissal without a charge sheet, an opportunity to respond and a proper inquiry is routinely set aside, and the reinstatement and back-wages exposure is large. Where standing orders apply to the establishment, follow the procedure they set out.
Payment in lieu of notice should be at the election of the Company, as drafted, rather than a right of the employee to buy out notice. Garden leave keeps the employee bound by duties of fidelity during the notice period and is more useful than a post-employment restraint that will not be enforced.
Clause 9.3 states this plainly. Section 27 of the Indian Contract Act, 1872 voids restraints of trade, and Indian courts do not enforce non-competition covenants operating after employment ends. Confidentiality, non-solicitation, intellectual property assignment and obligations during employment are enforceable. Including an unenforceable non-compete gives false comfort to the employer and misleads the employee.
A broadly drafted transfer clause is standard, but a transfer used to force a resignation, or one requiring relocation without notice or support, is open to challenge as constructive dismissal. Clause 5.6 requires reasonable notice and relocation costs for that reason.
A fixed-term employee is entitled to the same statutory benefits as a permanent employee in proportion to service, and eligibility for gratuity does not depend on completing the usual qualifying period. Where the appointment is fixed-term, state the start and end dates, and do not use successive fixed terms to avoid obligations that would apply to permanent employment.
A wage slip in the prescribed form must be issued each wage period, and the establishment must maintain registers of employees, wages, attendance and leave in the prescribed forms. The appointment letter is the first record; the registers are what an inspector examines next.
The consolidated legislation operates alongside rules notified separately by each State, and the position is not uniform on working hours, overtime eligibility, leave, notice, standing orders thresholds and record-keeping. Confirm the requirements for the State of the place of work before adopting this template across locations.
Reflects Indian law current as of {{DATE OF USE}}. Wage definitions, prescribed particulars, leave entitlements, settlement timelines and State rules all change — have this template and the salary structure reviewed by an employment adviser and a payroll specialist before use.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, company secretary, or chartered accountant as relevant) before you rely on it.